THE REPUBLIC OF KENYA

Kimberley Fernandez | Roll No- 15

Kimberley Fernandez

Republic of Kenya

TABLE OF CONTENTS
ACKNOWLEDEGMENT THE REPUBLIC OF KENYA THE CONTINENT OF AFRICA SUMMARY ECONOMIC SUMMARY & TRADE IN 2010 GEOGRAPHICAL LOCATION THE CAPITAL CITY NAIROBI POPULATION INDIANS IN KENYA ETHNIC GROUPS WILDLIFE RELIGION CLIMATE HEALTH EDUCATION CULTURE ENTERTAINMENT INFRASTRUCTURE POLITICS & ADMINISTRATIVE REGIONS
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ECONOMY CURRENCY, EXCHANGE RATE, AND INFLATION GROSS DOMESTIC PRODUCT (GDP) INDUSTRY IN KENYA TOURISM AGRICULTURE FORESTRY AND FISHING MINING AND MINERALS INDUSTRY AND MANUFACTURING ENERGY OIL EXPLORATION FINANCIAL SERVICES LABOR VISION 2030 FOREIGN ECONOMIC RELATIONS KENYA EXPORTS KENYA IMPORTS REGIONAL ECONOMIC OVERVIEW COMPARISON OF E.A MACRO-ECONOMIC INDICATORS CRITICISM AND CHALLENGES CONCLUSION BIBLIOGRAPHY

28 30 32

34 36 38 38 39 40 42 43 43 44 45 47 47 48 49 50 51 52

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ACKNOWLEDGEMENT
I would like to thank my Professor Mr. DCosta for giving me this project on the REPUBLIC OF KENYA. I would also like to thank my parents for very helpful as this would not have been possible without their support.

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Republic of Kenya

The Republic of Kenya

Jamhuri ya Kenya

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Republic of Kenya

THE CONTINENT OF AFRICA

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SUMMARY
Kenya officially known as the Republic of Kenya is a country in East Africa that lies on the equator. With the Indian Ocean to its south-east, it is bordered by Tanzania to the south, Uganda to the west, South Sudan to the north-west, Ethiopia to the north and Somalia to the north-east. Kenya has a land area of 580,000 km2 and a population of nearly 41 million, representing 42 different people and cultures. The country is named after Mount Kenya, a significant landmark and second among Africa's highest mountain peaks. Following a referendum and adoption of a new constitution in August 2010, Kenya is now divided into 47 counties that are semi-autonomous units of governance. These units are expected to be fully implemented by August 2012 in time for the first general election under the new constitution. The counties will be governed by elected governors and will operate independent of the central government in Nairobi. The country's geography is as diverse as its multi-ethnic population. It has a warm and humid climate along its coastline on the Indian Ocean which changes to wildlife-

rich savannah grasslands moving inland towards the capital Nairobi. Nairobi has a cool climate that gets colder approaching Mount Kenya, which has three permanently snow-capped peaks. The warm and humid tropical climate re-appears further inland towards Lake Victoria, before giving way to temperate forested and hilly areas in the western region. The North Eastern regions along the border with Somalia and Ethiopia are arid and semi-arid areas with neardesert landscapes. The country also has significant geothermal activity that puts a lot of electricity in the national grid. Kenya's capital city, Nairobi, is situated next to a national park. The country is famous for its safaris and diverse world-famous wildlife reserves such as Tsavo National Park, the Maasai Mara, Nakuru National Park, and Aberdares National Park that attract tourists from all over the world. Lake Victoria, the world's second largest fresh-water lake (after Lake Superior in the US and Canada) and the world's largest tropical lake, is situated to the southwest and is shared with Uganda and Tanzania.
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Republic of Kenya As part of East Africa, Kenya has seen human habitation since the Lower Paleolithic period. The Bantu expansion reached the area by the first millennium AD, and the borders of the modern state comprise the crossroads of the Niger-Congo, Nilo-Saharan, and Asiatic linguistic areas of Africa, making Kenya a truly multi-cultural state. European and Arab presence in Mombasa dates to the Early Modern period, but European exploration of the interior began only in the 19th century. The British Empire established the Protectorate in 1895, known from 1920 as the Kenya Colony. The independent Republic of Kenya was founded in December 1963. The capital, Nairobi, is a regional commercial hub. The economy of Kenya is the largest by GDP in East and Central Africa. Agriculture is a major employer and the country traditionally exports tea and coffee, and more recently fresh flowers to Europe. The service industry is a major economic driver, mostly the telecommunications sector, and contributes 62 percent of GDP. Kenya is a member of the East African Community.

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Economic summary
$32.16 billion (2010) at Market Price. $ 66.03 billion (Purchasing Power Parity, 2010)

GDP
There exists an informal economy that is never counted as part of the official GDP figures.

Annual growth rate Per capita income Natural resources Agricultural produce

5.8% (2005): 2006 = 6.1% : Estimate for 2007 = 7.2% Per Capita Income (PPP)= $1,600 Wildlife, land (5% arable),Titanium, Coal tea, coffee, sugarcane, horticultural products, corn, wheat, rice, sisal, pineapples, pyrethrum, dairy products, meat and meat products, hides, skins petroleum products, grain and sugar milling, cement, beer, soft drinks, textiles, vehicle assembly, paper and light manufacturing, tourism

Industry

Trade in 2010 Exports

$5.22 billion tea, coffee, horticultural products, petroleum products, cement, pyrethrum, soda ash, sisal, hides and skins, fluorspar

Major markets (2010) Imports

Uganda 10.1%, Tanzania 9.8%, UK 8.8%, Netherlands 8.2%, US 5.8%, Egypt 4.7%, Democratic Republic of the Congo 4.3% (2010)[68] $11.2 billion machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics

Major suppliers China 13.6%, India 13.4%, UAE 9.7%, South Africa 8.4%, Saudi Arabia
6.8%, Japan 4.7% (2010)
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GEOGRAPHICAL LOCATION
The Geography of Kenya gives one a complete idea about the location of the country and its physical features. At 580,367 km2 (224,081 sq mi), Kenya is the world's forty-seventh largest country. It lies between latitudes 5N and 5S, and longitudes 34 and 42E. Kenya is located on the eastern part of the African continent. The country is bordered by Sudan and Ethiopia in the north and Uganda to the west. Somalia lies to the east of the country while Indian Ocean borders the country in the southeastern part. To the southwest of the country lies Tanzania while to the west lies Lake Victoria and Uganda. The Kenyan coast is a low-lying area, which is extremely fertile. It has a coral reef and is supported by a dry coastal plain that is covered by thorny bushes and savanna. In general one can say, that the country stretches from the sea level in the east to the snow capped mountain in the north. The terrain of the country gradually changes from the low-lying coastal plains to the Kenyan highlands. The highest point of the country lies in Mount Kenya, which is 5,199 meters high. Apart from this, the other mountain ranges that one can find over here include Mount Elgon and Mount Kilimanjaro. The biggest feature of Kenya is the Great Rift Valley located in the central and western part of the country. The valley basically dissects the Kenyan highlands into east and west. The highlands have a cool climate and are known for their fertile soil. It is one of the major agricultural regions of the country. In general, the regions of the country are mostly arid and of semi desert nature. One can find a large number of swamps in the Loraine Plain, situated in the northeastern part of the country. One can find a large number of lakes and rivers in this country, which forms a major part of the geography of Kenya. On the northern part of the country one can find Lake Turkana. On the western part of the country one can find Lake Victoria. Other major lakes of the country include Lake Naivasha and Lake Nakuru. There are a large number of rivers also in Kenya. The rivers Tana and Athi flows in the southeastern part of the country while Nzoia, Yala and Gori, flows across the country before draining into Lake
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Republic of Kenya Victoria. Another major river of the county is the Ewaso Ngiro, found in the northeastern part of the country. Apart from these, the geography of Kenya also includes its numerous forests also. To the east one can find a large number of rainforests. Some of the major forest areas of the country include the Kakamega Forest and the Mau Forest.

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Republic of Kenya

THE CAPITAL CITY - NAIROBI

Nairobi is the capital and largest city of Kenya. The city and its surrounding area also form the Nairobi County. The name "Nairobi" comes from the Maasai phrase Enkare Nyirobi, which translates to "the place of cool waters". However, it is popularly known as the "Green City in the Sun" and is surrounded by several expanding villa suburbs. Founded in 1899 as a simple rail depot on the railway linking Mombasa to Uganda, the town quickly grew to become the capital of British East Africa in 1907 and eventually the capital of a free Kenyan republic in 1963. During Kenya's colonial period, the city became a centre for the colony's coffee, tea and sisal industry. Nairobi is also the capital of the Nairobi Province and of the Nairobi District. Nairobi is the most populous city in East Africa, with a current estimated population of about 3 million. Nairobi is currently the 12th largest city in Africa, including the population of its suburbs. The City of Nairobi enjoys the status of a full administrative County/Region. The Nairobi province differs in several ways from other Kenyan regions. The county is entirely urban. It has only one local authority, Nairobi City Council. Nairobi Province was not divided into "districts" until 2007, when three districts were created. In 2010, along with the new constitution, Nairobi was renamed a County. Nairobi is now one of the most prominent cities in Africa politically and financially. Home to thousands of Kenyan businesses and over 100 major international companies and organizations, including the United Nations Environment Programme (UNEP) and the main coordinating and headquarters for the UN in Africa & Middle East, the United Nations Office in Nairobi (UNON), Nairobi is an established hub for business and culture.

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Republic of Kenya The Nairobi Stock Exchange (NSE) is one of the largest in Africa and the second oldest exchange on the continent. It is ranked 4th in terms of trading volume and capable of making 10 million trades a day. Nairobi is home to the Nairobi Stock Exchange (NSE), one of Africa's largest. The NSE was officially recognized as an overseas stock exchange by the London Stock Exchange in 1953. Nairobi is the regional headquarters of several international companies and organizations. In 2007, General Electric, Young & Rubicam, Google, Coca-Cola, Airtel and Cisco

Systems relocated their African headquarters to the city. The United Nations Office at Nairobi hosts UNEP and UN-Habitat headquarters. Several foreign companies have factories based in and around the city. These include Goodyear, General Motors, Toyota Motors, and Coca Cola.

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POPULATION
Kenya has a young population, with 73% of residents aged below 30 years, due to rapid population growth from 2.9 million to 40 million over the last century. In addition, Kenya's capital, Nairobi, is home to Kibera, one of the world's largest slums. The shanty town is believed to house between 170,000 and 1 million locals. The UNHCR base in Dadaab in the north also currently houses around 500,000 people. Major cities in Kenya include:
City Nairobi Mombasa Nakuru Kisumu Meru Nyeri Machakos Eldoret Population 3 375 000 966 000 337 200 273 400 273 000 179 500 140 900 100,000

INDIANS IN KENYA
There are currently over 100,000 Indians in Kenya, most living in the major urban areas of Nairobi and Mombasa with others living in rural areas. Most are Hindus and with some Muslims and Sikhs, often with their own businesses and places of worship. South Asians were originally brought over to cut sugar cane or construct the railways. Indian temples and mosques can be found all over the country. There are more than 20 Sikh Gurdwaras.

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ETHNIC GROUPS
Kenya's rising urban population has a diverse ethnic background whose people are variedly fluent in their mother tongues and the two official languages English and Swahili. Semi-urban and rural populations are less multilingual with many in remote villages speaking only their mother tongue.
Ethnic Groups Kikuyu Luhya Luo Kalenjin Kamba Kisii Meru Other African Non-African (Asian, European and Arab) Percentage 22% 14% 13% 12% 11% 6% 6% 15% 1%

Kikuyu attire

woman

in

traditional

WILDLIFE

Kenya has considerable land area devoted to wildlife habitats, including the Masai Mara, where Blue Wildebeest and other bovid participate in a large scale annual migration. Up to
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Republic of Kenya 250,000 blue wildebeest perish each year in the long and arduous movement to find forage in the dry season. The "Big Five" animals of Africa can be found in Kenya and in the Masai Mara in particular: the lion, leopard, buffalo, rhinoceros and elephant. A significant population of other wild animals, reptiles and birds can be found in the national parks and game reserves in the country. especially The annual animal of migration the wildebeest

migration

occurs between June and September with millions of animals taking part. Kenya is the setting for one of the Natural Wonders of the World the

great wildebeest migration. 11.5 million of these ungulates migrate a distance of 1,800 miles from the Serengeti in neighboring Tanzania to the Masai Mara in Kenya, in a constant clockwise fashion, searching for food and water supplies.

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RELIGION
The vast majority of Kenyans are Christian (83%), with 47.7% regarding themselves as Protestant and 23.5% as Roman Catholic. Sizeable minorities of other faiths do exist (Muslim 11.2%, indigenous beliefs 1.7%). Sixty percent of the Muslim population lives in Coast Province, comprising 50 percent of the total population there. Western areas of Coast Province are mostly Christian. The upper part of Eastern Province is home to 10 percent of the country's Muslims, where they constitute the majority religious group. In addition, there is a large Hindu population in Kenya (around 50,000), who have played a key role in the local economy. There is also a small group of Baha'is.

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Republic of Kenya

CLIMATE
As Kenya has a diverse geography, its climate and weather conditions are also varied. The climate in Kenya is greatly influenced by its location close to the equator and its varied terrain. Kenya basically enjoys a tropical climate. The coastal side of the country has a hot and humid climate. Rainfall is high in the coastal regions of the country. Most of the rains occur between April and July. Rainfall is more on the eastern coast of the country. The climate is also humid in the Lake Victoria basin. This is primarily because of the moist westerly winds that rises form the Atlantic Ocean and the Congo Basin. Generally speaking, the country has a dry climate. Apart from the coastal areas, the central of the country experiences a cool and humid climate while the northern and eastern part of the country enjoys a hot and dry climate. Because of this reason, the regions in this area are of semi-desert and arid character. Kenya receives a lot of sunshine all around the year. Summers are extremely hot over here and one is expected to wear light summer clothes. During the daytime the weather is hot, while the nights are cooler and comfortable. The early hours of the morning are also cool and pleasant. February and March are the hottest months of the country while July and August are the cooler months. The long rainy season occurs from April to July, while the shorter one occurs from October to December. The temperature in the coastal town of Mombasa ranges from a maximum of 30.30 Celsius to a minimum of 22.40 Celsius. Nairobi, the capital of the country has a temperature of 25.20 Celsius maximum and 13.60 Celsius minimum, while Eldoret has a maximum temperature of 23.60 Celsius and a minimum temperature of 9.50 Celsius. The period ranging from June to September represent the migration period of the wildlife found in the country. It is one of the most spectacular events of the country. The climate in Kenya is varied and has a profound influence on the life and the settlement patterns of the people of the country.
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Republic of Kenya

HEALTH
Despite major achievements in the health sector, Kenya still faces many challenges. Too many women and children still die at birth or within the first year of life. More die before their 5th birthday. Preventable diseases such as malaria, HIV/AIDS, pneumonia, diarrhea and malnutrition are the major child killers and responsible for much morbidity. Weak policies, inadequate health workers, weak management and poor leadership in most public health facilities are largely to blame. The total fertility rate in Kenya is estimated to be 4.49 children per woman in 2012. Life expectancy is estimated at between 47 and 55 years. There are a large number of HIV-positive people in Kenya. Maternal mortality is high, partly because of female genital mutilation. This practice is however on the decline as the country becomes more modernised and the practice was also banned in the country in 2011.

EDUCATION
The country's literacy level stands at 85% of the whole population. Kenya's education system consists of early childhood education, primary, secondary and college. At the end of primary education, pupils sit the Kenya Certificate of Primary Education (KCPE), which determines those who proceed to secondary school or vocational training. For those who proceed to secondary level, there is a national examination at the end of Form Four the Kenya Certificate of Secondary Education (KCSE), which determines those proceeding to the universities, other professional training or employment. The Joint Admission Board (JAB) is responsible for selecting students joining the public universities. Other than the public schools, there are many private schools in the country, mainly in urban areas. Similarly, there are a number of international schools catering for various overseas educational systems. In January 2003, the Government of Kenya announced the introduction of free primary education. As a result, primary school enrollment increased by about 70%. Secondary and tertiary education enrollment has not increased proportionally because payment is still required for attendance. Private schooling also exists in Kenya. In 2007 the government issued a statement declaring that from 2008, secondary education would be heavily subsidized, with the government footing all tuition fees.

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CULTURE

Culture in Kenya is a mix of diverse cultures and traditions. Owing to its colonial history, the culture of the country has a strong European and Arabian influence. However, inspite of such strong foreign influence, Kenya culture is extremely unique and has an identity of its own. Culture of Kenya is amply reflected through its people, their customs, traditions, society, art, dance and music. The main culture of the country is the Swahili Culture and the Maasai culture. The Swahili Culture is the oldest culture of the country. The Bantu language speakers, who settled on the coastal part of the country, were responsible for creating and spreading this culture. The Maasai culture, which is the most well known culture of the country, was spread by the Maasai, a seminomadic tribe known for their clothes, jewellery and distinct custom. Apart from this, there are a large number of other tribes like the Kikuyu, Kamba, Gusii, Luhya, and Luo, who have their own distinct culture, which adds to the unique culture of the country and its people. Culture of Kenya is a mix of both modern and traditional cultures. Where on one hand the different tribes of the country have maintained their unique style of clothing, music and dance, on the other hand they have also adopted the cultural patterns of modern society. Nairobi, the capital of the country, is the seat of the country's culture. MAASAI WOMEN

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Republic of Kenya The clothing is unique. It is extremely colorful and are heavily embroidered. The clothes are usually red and black in color to show their love for mother Earth. The people also love to wear heavy jewelry. Jewelry is made from colorful beads and other articled and consists of headgears, necklaces, nose rings, earrings, armlets, anklets and others. Kenya has a diverse assortment of popular music forms, in addition to multiple types of folk music based on the variety over 40 regional languages. Infact, it is home to different varieties of music, which include afro-fusion music, Benga music, Kenyan hip-hop and different types of folk music and tribal music. Guitars and drums are the popular instruments used in Kenyan music. The country has also made valuable contributions in the field of film and theatre. A large number of film festivals and theatre festivals are held in this country. Kenyan people are sports lovers.

Football, rugby, cricket and boxing are the most popular sports played in the country. Road running and athletics are also popular. But the country is known chiefly for its dominance in Middle-distance and long-distance athletics. Kenya has consistently produced Olympic and Commonwealth Games champions in various distance events, especially in 800 m, 1,500 m, 3,000 m steeplechase, 5,000 m, 10,000 m and the marathon. Kenya won several medals during the Beijing Olympics, five gold, five silver and four bronze, making it Africa's most successful nation in the 2008 Olympics. Kenya has been a dominant force in women's volleyball within Africa, with both the clubs and the national team winning various continental championships in the past decade. Cricket is another popular and the most successful team sport. Kenya has competed in the Cricket World Cup since 1996. They participated in the ICC Cricket World Cup 2011. Kenya was a regional power in soccer but its dominance has been eroded by wrangles within the Kenya Football Federation. This has led to
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Republic of Kenya a suspension by FIFA which was lifted in March, 2007. In the motor rallying arena, Kenya is home to the world famous Safari Rally, commonly acknowledged as one of the toughest rallies in the world. Culture of Kenya is a conglomeration of diverse cultures belonging to the different tribal groups and the people of the country.

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ENTERTAINMENT
Kenya entertainment includes several activities that can make the stay at the place memorable. Kenya is a country that offers numerous attractions to the tourists. There are innumerable choices to be made regarding the various sources of entertainment in Kenya. Nightlife in Kenya is also highly active with various nightlife entertainment facilities for the tourists. Kenya Entertainment in not only restricted to the capital city of the country, but is also spread to the various other regions in Kenya. There are many nightclubs, discos, bars and pubs in Nairobi as well as in Mombasa, which provide complete entertainment to both the local people and the tourists. The disc jockeys churn out lively and catchy music for the visitors. The nightclubs and hotels of Kenya generally organize live music bands during evening and night. Many people gather in these places to get a flavor of live band music. The clubs and hotels are busier during the weekends. Many concerts are also held in Kenya, especially during the festive season in the country. There are also tribal and traditional dances and songs that are hosted and organized in various halls of the country. Apart from the various nightclubs and casinos, there are also other entertainment sources in Kenya. These include various media sources like radio, television, films and newspapers. Numerous television channels broadcast myriad programs that cater to various types of people in the country. Some of the popular channels are as follows:

Nation TV Kenya Television Network Stella TV Kenya Broadcasting Corporation Metro TV Family TV Citizen TV

Radio in Kenya is also an important source that provides entertainment to the people. The Kenya Broadcasting Corporation provides various radio networks at the regional, national and local level. KBC English Radio Service and KBC Kiswahili Radio Service are the two radio stations

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Republic of Kenya that operate under the National Radio Network in Kenya. The FM channels that are broadcasted on Kenya radio include:

Kiss FM Kenya Capital FM Kameme FM

Newspapers are a source of entertainment as well as information in the country. The Kenyan newspapers cover topics related to politics, sports, regional news, entertainment and many more. Some of the renowned newspapers that are published and circulated in Kenya are as follows:

Kenya Times Standard Kenya East African Standard Kenya Daily Nation Kenya

Last but not the least is Kenya films. Films are a major source of entertainment in the country. Many internationally renowned films have been made in Kenya. The settings of the films in the natural African landscapes have enhanced the beauty of the films to a great deal.

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INFRASTRUCTURE
Kenya has an extensive road network of approximately 95,000 miles connecting most parts of the country. According to the U.S. Department of State Country Commercial Guide 2000 , however, the current state of most roads is deplorable. Of the total 63,800 kilometers of highway, for example, only 8,868 kilometers are paved (1996 est.). In collaboration with various donors, the Kenyan government recently launched the ambitious 'Roads 2000' project, designed to create links between all major and minor roads, in addition to rehabilitating 20,000 kilometers of roads in 6 urban centers. The project, which will span approximately 3 years, is expected to cost US$245 million. The road network accounts for over 80 percent of Kenya's total passenger and freight transport. The state-owned Kenya Railways Corporation (KR) manages Kenya's single-track railway system, which runs from Mombasa through Nairobi to the Ugandan border. As a result of heavy operational losses, there has been a steady deterioration in the KR's services. The World Bank and the British Overseas Development Administration are currently funding a railway rehabilitation project to make KR commercially viable, while the government has made plans to open up the railways to private-sector participation by limiting the KR's role to owning and regulating lines. Accordingly, the KR would lease locomotives to private-sector operators. Kenya's port of Mombasa, which has an annual average freight throughput of about 8.1 million tons, is the country's main seaport and serves most East and Central African nations. The deepwater port, boasting 21 berths, offers specialized facilities, including cold storage, warehousing, and container terminal. The international and domestic air

transport infrastructure is relatively well-developed in Kenya. There are 3 international airports; the largest is Nairobi's Jomo Kenyatta International Airport, which serves more than 30 airlines providing scheduled services to cities around the world. In total, Kenya has 230 airports, including 21 that are paved. Wilson
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Republic of Kenya airport in Nairobi, the busiest airport in Africa, handles light aircraft and general aviation. In 1999, the Communications Commission of Kenya was established to regulate telecommunications and radio communications in the country. In the same year, the state-owned Kenya Posts and Telecommunications Corporation was split into 2 separate parastatalsTelkom Kenya, a telecommunication corporation, and Postal Corporation of Kenya, a postal services corporation. Kencell, a joint venture between Vivendi France and Sameer of Kenya, won the second cellular license bid in 1999 to provide cellular services in competition with the Telkom subsidiary, Safaricom. The government plans to sell up to 49 percent of Telkom Kenya through the Nairobi Stock Exchange. As of 1998, there were 290,000 main telephone lines in use, or approximately 9.9 telephone lines per 1,000 people. The United States, in comparison, boasted 640 phone lines per 1,000 people in 1996. Kenya's electricity services are mostly provided by the state-owned Kenya Power and Lighting Company (KPLC), though an Electricity Regulation Board was appointed in 1998 to manage the opening up of the power sector to independent private producers. Since 82.74 percent of the power supply comes from hydroelectricity, power outages and blackouts have become increasingly common as a result of chronic drought. In 1999-2000, Kenya experienced its worst drought in 40 years, a development that forced the KPLC to introduce an emergency rationing program in July 2000 under which electricity supplies have been cut off for 12 hours a day. Further adding to the problem, hydro equipment tends to be outdated and poorly maintained. Consequently, the government is eager to further develop both thermal and geothermal sources of power. Two international companies were licensed at the beginning of 1997 to respectively produce 43 MW of power from a thermal plant in Mombasa and 45.5 MW from a diesel plant in Nairobi. In 1998, total electricity production in Kenya equaled 4.23 billion kWh. Only 8 percent of the Kenyan population is connected to the national grid.

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POLITICS
Kenya is a presidential representative democratic republic, whereby the President is both the head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both President Mwai Kibaki the government and the National Assembly. The Judiciary is independent of the executive and the legislature.

Kenya has maintained remarkable stability despite changes in its political system and crises in neighboring countries. In December 2002, Kenyans held democratic and open elections, most of which were judged free and fair by international observers. The 2002 elections marked an important turning point in Kenya's democratic evolution in that power was transferred peacefully from the Kenya African Union (KANU), which had ruled the country since independence to the National Rainbow Coalition (NARC), a coalition of political parties. Under the presidency of Mwai Kibaki, the new ruling coalition promised to focus its efforts on generating economic growth, combating corruption, improving education, and rewriting its constitution. A few of these promises have been met

ADMINISTRATIVE REGIONS
The provinces are: 1. Central 2. Coast 3. Eastern 4. Nairobi 5. North Eastern 6. Nyanza 7. Rift Valley 8. Western Kenya is divided into 47 semi-autonomous counties that will be headed by governors who will be elected in the first general election under
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Republic of Kenya the new constitution in August 2012 .Under the old constitution, Kenya comprised eight provinces each headed by a Provincial Commissioner (centrally appointed by the president). The provinces were subdivided into districts . There were 69 districts as of 1999 census. Districts are then subdivided into 497 divisions . The divisions are then subdivided into 2,427 locations and then 6,612 sub locations. The City of Nairobi enjoys the status of a full administrative province. The government supervises administration of districts and provinces.

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ECONOMY
Despite western donors' early disappointment with the government, the economy has seen much expansion, seen by strong performance in tourism, higher education and telecommunications, and acceptable post-drought results in agriculture, especially the vital tea sector. Kenya's

economy grew by more than 7% in 2007 and its foreign debt was greatly reduced. But this changed immediately after the disputed presidential election of December 2007, following the chaos which engulfed the country. East and central Africa's biggest economy has posted tremendous growth in the service sector, boosted by rapid expansion in telecommunication and financial activity over the last decade, and now contributes 62 percent of GDP. Unfortunately, a massive 22 percent of GDP still comes from the unreliable agricultural sector which employs 75 percent of the labor force (a consistent characteristic of under-developed economies that have not attained food security - an important catalyst of economic growth) and a significant portion of the population regularly starves and is heavily dependent on food aid. Industry and manufacturing is the smallest sector that accounts for 16 percent of the GDP. Kenya has traditionally been a liberal market with minimal government involvement (price control) seen in the oil industry. However, recent legislation allows the government to determine and gazette price-controls on essential commodities like maize flour, kerosene and cooking oil. Privatization of state corporations like the defunct Kenya Post and Telecommunications Company, which resulted in East Africa's most profitable company Safaricom, has led to their revival due to massive private investment. As of May 2010, economic prospects are positive with 45% GDP growth expected, largely because of expansions in tourism, telecommunications, transport, construction and a recovery in agriculture. The World Bank predicts growth of 4% in 2010 and a potential of 4.9% growth in 2011. In March 1996, the Presidents of Kenya, Tanzania, and Uganda re-established the East African Community (EAC). The EAC's objectives include harmonizing tariffs and customs regimes, free movement of people, and improving regional infrastructures. In March 2004, the three East African countries signed a Customs Union Agreement.
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Republic of Kenya The more efficient and lucrative technology-knowledge-and-skill-based service; industry and manufacturing sectors only employ 25 percent of the labor force but contributes the remaining 75 percent of the GDP. Kenya ranks poorly on Transparency International's corruption perception index. Kenya is East and Central Africa's hub for financial services. The Nairobi Securities Exchange (NSE) is ranked 4th in Africa in terms of Market capitalization. The Kenya banking system is supervised by the Central Bank of Kenya (CBK). As of late July 2004, the system consisted of 43 commercial banks (down from 48 in 2001), several non-bank financial institutions, including mortgage companies, four savings and loan associations, and several score foreign-exchange bureaus.

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Republic of Kenya

CURRENCY, EXCHANGE RATE, AND INFLATION

The Kenyan shilling replaced the East African shilling in 1966 at par. COINS The first coins were issued in 1966 in denominations of 5, 10, 25 and 50 cents, and 1 and 2 shillings. Twenty-five cents coins were not minted after 1969; 2 shillings coins were last minted in 1971. In 1985, 5 shillings coins were introduced, followed by 10 shillings in 1994 and 20 shillings in 1998. Between 1967 and 1978, the portrait of Jomo Kenyatta, the first president of Kenya, originally appeared on the obverse of all of independent Kenya's coins. In 1980, a portrait of Daniel arap Moi replaced Kenyatta until 2005, when the central bank introduced a new coin series that restored the portrait of Kenyatta. The coins are 50 cents and 1 shilling in stainless steel and bimetallic coins of 5, 10 and 20 shillings. A bi-metallic 40 shilling coin with the portrait of President Kibaki was issued in 2003 to commemorate the fortieth anniversary of independence (19632003). New coins with the image of Kenyatta were issued in 2005. BANKNOTES In 1966, the Central Bank of Kenya issued notes in denominations of 5, 10, 20, 50 and 100 shillings. 5 shillings notes were replaced by coins in 1985, with the same happening to 10 and 20 shillings in 1994 and 1998. In 1986, 200 shillings notes were introduced, followed by 500 shillings in 1988 and 1000 shillings in 1994. As with the coins Mzee Jomo Kenyatta appeared on the banknotes issued until 1978, with Daniel Arap Moi's portrait replacing him in 1980. In 2003, after Mwai Kibaki replaced Moi as
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Republic of Kenya president, 5, 10, and 20 shilling notes from the 1978 series with Kenyatta's picture that had been in storage were issued, and circulated for a time. A new series of notes was then introduced on which Kenyatta reappeared with denominations of 50, 100, 200, 500 and 1000 shilling. The issue of 12 December 2003 commemorates the "40 years of Independence 1963-2003". The banknotes are printed in Nairobi by De La Rue. EXCHANGE RATE The exchange rate of Kenya shilling slumped dramatically in mid-2011, from about 83 shillings per US dollar to about 100 shillings per US dollar at late 2011. The Central Bank of Kenya shifted its target to tighten liquidity, including increasing interest rate and money market operations. But expected inflows due to tea export drove up the exchange rate to about 84 shillings per US dollar on 31 January 2012. INFLATION The inflation rate in Kenya was last reported at 18.9 percent in December of 2011.

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Republic of Kenya

GROSS DOMESTIC PRODUCT (GDP)

Kenyas economic performance since independence In 2006 Kenyas GDP was about US$17.39 billion. Per capita GDP averages somewhat more than US$450 annually. Adjusted in purchasing power parity (PPP) terms, per capita GDP in 2006 was about US$1,200. The countrys real GDP growth picked up to 2.3 percent in early 2004 and to nearly 6 percent in 2005 and 2006, compared with a sluggish 1.4 percent in 2003 and throughout President Daniel Arap Mois last term (19972002). Real GDP is expected to continue to improve, largely because of expansions in tourism, telecommunications, transport, and construction and a recovery in agriculture. The Kenya Central Bank forecast for 2007 is between 5 and 6 percent GDP growth. GDP composition by sector, according to 2004 estimates, was as follows: agriculture, 25.7 percent; manufacturing, 14.0 percent; trade, restaurants, and hotels, 13.8 percent; transport and communications, 6.9 percent; government services, 15.6 percent; and other, 24.0 percent.

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Republic of Kenya Kenya's 2010 Economic Performance and Outlook for 2011: In 2010, Kenya has seen the return of higher growth projected at 4.9 percent, and may now be at a tipping point for robust growth. Five factors are creating a positive momentum: the new constitution, EAC integration, ICT innovations, strong macroeconomic management, and recent investments in infrastructure. Services, the driver of previous years' growth, have moderated while agriculture and industry are rebounding after two weak years. ICT has been the main driver of Kenya's economic growth over the last decade, growing on average by 20 percent annually, and propelling the combined transport and communications sector into the economy's second largest (after agriculture). Since 2000, Kenya's economy grew at an average of 3.7 percent. Without ICT, growth in 2010 would have been a lackluster 2.8 percentsimilar to the population growth rateand income per capita would have stagnated. Over the last three decades Kenya has experienced only two short episodes when economic growth exceeded five percent and was sustained for at least three consecutive years: 1986-88 and 2004-2007. Economic growth in 2011-12 could range between 5.3 and 6.0 percent if no shocks occur. Public sector investments in infrastructure will help to stimulate this growth. However, the timely implementation of the constitutional reforms would also be necessary to help boost business confidence. CONTRIBUTION OF KEY SECTORS TO GDP GROWTH SECTOR Agriculture Manufacturing Construction Wholesale & retail trade Hotel & restaurants Transport &communications 2009/10 (%) -22.1 4.7 15.1 14.9 15.9 28.9 2010/11 (%) 24.5 7.8 2.9 14.4 1.0 13.0 CHANGE (%) 46.6 3.1 -12.2 -0.5 -14.9 -15.9

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Republic of Kenya

INDUSTRY IN KENYA
TOURISM
Kenya's services sector, which contributes about 63 percent of GDP, is dominated by tourism. Kenya has over the years become a major tourist destination of the world. The country with its breath taking scenery, amazing wildlife and diverse culture has been attracting tourists from all across the world every year. Kenya Tourism has acquired a lot of importance over the past few years and the government of the country has left no stone unturned in attracting tourists tom this exotic country. Tourism in Kenya is mainly centered around two major geographical areas of the country, which include the beaches on the southern coast and the numerous national parks. The country is home to a large number of natural reserves also. One can check out the elephants, giraffes, rhinoceros's, leopards, cheetahs, lions and a variety of birds like falcons and others in these natural reserves. Some of the major wildlife sanctuaries that one can pay a visit include the Amboseli National Reserve,

Chyulu Hills National Park, Tsavo East National Park and others. Bedsides these, one can pay a visit to the beaches on the coast of the Indian Ocean. One can pay a visit to the Shela Beach in the city of Lamu. Travelers coming here for a holiday can take a look at breathtaking view of its scenery and picturesque landscapes. One can take a look at the Laikipia Plateau in east Kenya or pay a visit to the Taita Hills in the southern part of the country. When on a vacation to Kenya, one can pay a visit to the cities of Lamu, Nairobi, Mombassa, Kisumu, Nakuru, Eldoret and others. The cities are known for their history and one
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Republic of Kenya can pay a visit to the numerous tourist attractions found over here, which includes the Times Tower, Railway Museum, Blue Market, Watamu National marine Park and others. Kenya tourism has had a favorable impact on the culture and tradition of the country. It has helped in preserving the cultural traditions, customs, music and dance of the country. The people of the country have also become much more aware and knowledgeable. Tourism has inculcated environmental awareness amongst them and has also widened their outlook. Tourism is a major industry of Kenya. Tourism has made major contributions toward the country's GDP, over the past few years and has thus contributed towards the economic development of the country. Large number of international travelers come to this country and embarks on adventure safaris, which helps in generating revenue for the country. Tourism has also helped in providing employment to a large number of people in Kenya. The hotel industry has also flourished because of this reason. A large number of hotels are regularly coming up over here to provide accommodation to the tourists coming here for a holiday. Tourism generates revenue of nearly $500million per year. Kenya tourism is a rapidly growing industry and is all set to help in making valuable contributions towards the development of the country.

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Republic of Kenya

AGRICULTURE

The agricultural sector continues to dominate Kenyas economy, although only 15 percent of Kenyas total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 percent can be classified as first-class land. In 2006 almost 75 percent of working Kenyans made their living on the land, compared with 80 percent in 1980. About one-half of total agricultural output is non-marketed subsistence production. Agriculture is the second largest contributor to Kenyas gross domestic product (GDP), after the service sector. In 2005 agriculture, including forestry and fishing, accounted for about 24 percent of GDP, as well as for 18 percent of wage employment and 50 percent of revenue from exports. The principal cash crops are tea, horticultural produce, and coffee; horticultural produce and tea are the main growth sectors and the two most valuable of all of Kenyas exports. In 2005 horticulture accounted for 23 percent and tea for 22 percent of total export earnings. Coffee has declined in importance with depressed world prices, accounting for just 5 percent of export receipts in 2005. Kenya is Africa's leading tea producer, and was fourth in the world, behind India, China, and Sri Lanka. Black tea is Kenya's leading agricultural foreign exchange earner. Production in 1999 reached 220,000 tons. Tea exports were valued at $404.1 million in 2001, or nearly 18% of total exports. The tea industry is divided between small farms and large estates. The small-scale sector, with more than 260,000 farmers, is controlled by the parastatal Kenya Tea Development Authority. The estates, consisting of 6075 private companies, operate on their own. Coffee is Kenya's third leading foreign exchange earner, after tourism and tea. In 2001, coffee earnings totaled $91.8 million. Production in 2001/02 amounted to 52,140 tons. Similar to the tea sector, coffee is produced on many small farms and a few large estates. All coffee is marketed
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Republic of Kenya through the parastatal Coffee Board of Kenya. The suspension of the economic provisions of the International Coffee Agreement in July 1989 disrupted markets temporarily, driving coffee prices to historical lows. Kenyan horticulture has become prominent in recent years, and is now the third leading agricultural export, following tea and coffee. Fresh produce accounted for about 30% of horticultural exports, and included green beans, onions, cabbages, snow peas, avocados, mangoes, and passion fruit. Flowers exported include roses, carnations, statice, astromeria, and lilies. Kenya is the world's largest producer and exporter of pyrethrum, a flower that contains a substance used in pesticides. The pyrethrum extract, known as pyrethrin, is derived from the flower's petals. The production of major food staples such as corn is subject to sharp weather-related fluctuations. Production downturns periodically necessitate food aidfor example, in 2004 aid for 1.8 million people because of one of Kenyas intermittent droughts. However, the expansion of credit to the agricultural sector has enabled farmers to better deal with the large risk of agriculture based on rainfall and the dramatic fluctuations of the prices of agricultural products. Tea, coffee, sisal, pyrethrum, corn, and wheat are grown in the fertile highlands, one of the most successful agricultural production regions in Africa. Livestock predominates in the semi-arid savanna to the north and east. Coconuts, pineapples, cashew nuts, cotton, sugarcane, sisal, and corn are grown in the lower-lying areas. Kenya's Agriculture Performance in 2010: The agriculture sector has been rebounding in 2010 and is expected to grow by 5 percent. This is an important development after two consecutive years of decline, when the sector contracted by a combined 6.7 percent. Favorable weather conditions and specific policy interventions under the government's economic stimulus program helped turn the sector around. The performance of Kenya's main agriculture exports in 2010 was strongest for tea which recovered rapidly from 2009 weather conditions. A combination of volume and price increases will see the sector perform even better than in 2008, which had previously been the best year for the sector. Although coffee is benefitting from an increase in global prices, output contracted as coffee production was slow to recover from the prolonged drought in early 2009. Horticulture
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Republic of Kenya exports contracted for the third consecutive year. The sector continued to be affected by a muted recovery in Europe, especially the fruits and vegetables. In addition, the volcanic ash crisis in April 2010 disrupted access to the key source markers in Europe

FORESTRY AND FISHING

Resource degradation has reduced output from forestry. In 2004 round wood removals came to 22,162,000 cubic meters. Fisheries are of local importance around Lake Victoria and have potential on Lake Turkana. Kenyas total catch reported in 2004 was 128,000 metric tons. However, output from fishing has been declining because of ecological

disruption. Pollution, overfishing, and the use of unauthorized fishing equipment have led to falling catches and have endangered local fish species.

MINING AND MINERALS

Kenya has no significant mineral endowment. The mining and quarrying sector makes a negligible contribution to the economy, accounting for less than 1 percent of gross domestic product, the majority contributed by the soda ash operation at Lake Magadi in south-central Kenya. Thanks largely to rising soda ash output, Kenyas mineral production in 2005 reached more than 1 million tons. One of Kenyas largest foreign-investment projects in recent years is the planned expansion of Magadi Soda. Apart from soda ash, the chief minerals produced are limestone, gold, salt, and fluorspar. All minerals not extracted are government property, according to the Mining Act.

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Republic of Kenya

INDUSTRY AND MANUFACTURING

Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14 percent of gross domestic product (GDP). Industrial activity, concentrated around the three largest urban centers, Nairobi, Mombasa, and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane

crushing, and the fabrication of consumer goods, e.g., vehicles from kits. Kenya is Africa's leading tea producer, and was fourth in the world, behind India, China, and Sri Lanka. Black tea is Kenya's leading agricultural foreign exchange earner. Tea exports were valued at $404.1 million in 2001, or nearly 18% of total exports. The tea industry is divided between small farms and large estates. The small-scale sector, with more than 260,000 farmers, is controlled by the parastatal Kenya Tea Development Authority. The estates, consisting of 6075 private

companies, operate on their own. There is a vibrant and fast growing cement production industry. Kenya has an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expanding informal sector commonly referred to as Jua Kali engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements. Kenya's inclusion among the beneficiaries of the U.S. Government's African Growth and Opportunity Act (AGOA) has given a boost to manufacturing in recent years. Since AGOA took effect in 2000, Kenya's clothing sales to the United States increased from US$44 million to US$270 million. Other initiatives to strengthen manufacturing have been the new government's favorable tax measures, including the removal of duty on capital equipment and other raw materials.

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Republic of Kenya

ENERGY
The largest share of Kenya's electricity supply comes from hydroelectric stations at dams along the upper Tana River, as well as the Turkwel Gorge Dam in the west. A petroleum-fired plant on the coast, geothermal and electricity

facilities at Olkaria (near

Nairobi),

imported from Uganda make up the rest of the supply. Kenya's installed capacity stood at 1,142 megawatts between 2001 and 2003. The stateowned Kenya Electricity Generating Company (KenGen), established in 1997 under the name of Kenya Power Company, handles the generation of electricity, while the Kenya Power and Lighting Company (KPLC), which is slated for privatization, handles transmission and distribution. Shortfalls of electricity occur periodically, when drought reduces water flow. To become energy sufficient, Kenya aims to build a nuclear power plant by 2017. Hydrocarbon reserves have yet to be discovered on Kenya's territory, despite several decades of intermittent exploration. Kenya currently imports all crude petroleum requirements. Kenya, east Africa's largest economy, has no strategic reserves and relies solely on oil marketers' 21day oil reserves required under industry regulations. Petroleum accounts for 20 to 25 percent of the national import bill. Although Kenya is yet to give a formal indication of where its exploration program, which now involves half a dozen companies, is headed, in recent weeks, well-placed sources in Uganda's oil industry have suggested that the country is on the verge on making an announcement that could cement East Africa's position as major oil region on the continent. Optimism surrounding the Kenyan program is informed by recent oil discoveries in Uganda that, combined with the fact that the rocks that form the East African Rift System are about the same age, suggests a high potential for oil in Kenya. Gas discoveries in Tanzania and significant proven oil reserves along
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Republic of Kenya the border between Uganda and DR Congo have also encouraged interest in the once largely overlooked region. Reacting to the current speculation about prospects for an early oil find, senior geologists at Uganda's Energy Ministry who were at the forefront of the country's search for oil two decades ago, said they had no reason to doubt that there was oil in Kenya, with the area around Lake Turkana and the coastal belt being singled out as the most promising prospects. Before its exit mid this year, China National Offshore Oil Corporation (CNOOC) had worked with Africa Oil and Lion Energy Corp to drill an exploratory well in block 9 in northern Kenya. It also had a license for block L2, an inland area in the Lamu basin.

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Republic of Kenya

OIL EXPLORATION
Early in 2006 Chinese President Hu Jintao signed an oil exploration contract with Kenya, the latest in a series of deals designed to keep Africa's natural resources flowing to China's rapidly expanding economy. The deal allowed for China's state-controlled offshore oil and gas company, CNOOC, to prospect for oil in Kenya, which is just beginning to drill its first exploratory wells on the borders of Sudan and Somalia and in coastal waters. No oil has been discovered yet, and there has been no formal estimate of the possible reserves. In the news recently Kenyas planned investment in oil and gas exploration may rise to a record as the discovery of crude in neighboring Uganda piques interest in the largely untapped territory, Petroleum Commissioner Martin Heya said. Tullow Oil Plc (TLW), the London-based explorer with the most licenses in Africa, plans to sink two test wells in north- western Kenya this year and early 2012, while U.S.-based Apache Corp. (APA) may drill offshore next year, Heya said in an interview in Nairobi, the Kenyan capital. Spending on exploration and drilling is estimated at $126 million, and other companies may follow as more plans are approved, he said. The level of activity is at a high and we think once Tullow starts drilling we must prepare ourselves for even more interest, Heya said. The more wells that are drilled, the faster a discovery will be made. Exploration companies are increasing spending in Kenya as neighboring Uganda, with an estimated 2.5 billion barrels of oil reserves, prepares to become a crude producer next year when Tullow expects to start pumping from the Lake Albert Basin. Only 32 exploratory wells have been drilled in Kenya. That compares with 480 in East Africa, 14,500 in the west of the continent and 19,000 in north and central Africa, according to data from U.K. - based explorer Afren Plc. (AFR) Big companies like Tullow coming into the country automatically creates more interest, Dragan Trajkov, an oil and gas analyst at Renaissance Capital Ltd. in London, said an e- mailed response to questions today. I wouldnt be surprised if the Kenyan government tries to capitalize on it, as it provides credibility to potentially finding more discoveries.

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Republic of Kenya

FINANCIAL SERVICES
Kenya is East and Central Africa's hub for financial services. The Nairobi Stock Exchange (NSE) is ranked 4th in Africa in terms of Market capitalization. The Kenya banking system is supervised by the Central Bank of Kenya (CBK). As of late July 2004, the system consisted of 43 commercial banks (down from 48 in 2001), several non-bank financial institutions, including mortgage companies, four savings and loan associations, and several score foreign-exchange bureaus. Two of the four largest banks, the Kenya Commercial Bank (KCB) and the National Bank of Kenya (NBK), are partially government-owned, and the other two are majority foreign-owned (Barclays Bank and Standard Chartered). Most of the many smaller banks are family-owned and -operated.

LABOR
In 2006 Kenyas labor force was estimated to include about 12 million workers, almost 75 percent in agriculture. The number employed outside small-scale agriculture and pastoralism was about 6 million. In 2004 about 15 percent of the labor force was officially classified as unemployed. Other estimates place Kenyas unemployment much higher, even up to 40 percent. In recent years, Kenya's labor force has shifted from the countryside to the cities, such as Nairobi, as Kenya becomes increasingly urbanized.

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Republic of Kenya

VISION 2030
In October 2006 the Kenya Government unveiled Vision 2030 with a focus on transforming national development. It is an ambitious long term strategy that will supersede the Economic Recovery Strategy for Wealth and Employment Creation which expired in December 2007. Vision 2030 aims to turn Kenya into an economic powerhouse by increasing income per head fivefold to $3,000 by achieving and sustaining 10% GDP growth per annum and transforming the country into an efficient modern democracy. Vision 2030 will be steered by the National Economic and Social Council which is chaired by the President and brings together CEOs of top businesses, social scientists, government officials and even international personalities like Baroness Chalker from the U.K. and Mr. Lee the former Prime Minister of Singapore.

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Republic of Kenya

FOREIGN ECONOMIC RELATIONS

Since independence, Kenya, a neutral country, has seen substantial foreign investment and significant amounts of development aid, some from Russia, some from China and others from the high developed countries. Between 60 and 70 percent of industry is still owned from abroad. Kenya's development assistance has come from increasingly diverse sources in recent years with China taking an increasingly higher prominent role than the west. The share of funding provided by the United Kingdom has fallen significantly, while that of multilateral agencies, particularly the World Bank and the European Development Fund, has increased. The most active investors currently are the Chinese. Kenya is active within regional trade blocs such as the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), a partnership of Kenya, Uganda, and Tanzania. The aim of the EAC is to create a common market of the three states modeled on the European Union. Among the early steps toward integration is the customs union which has eliminated duties on goods and non-tariff trade barriers among the members. Kenyas chief exports are horticultural products and tea. In 2005 the combined value of these commodities was US$1,150 million, about 10 times the value of Kenyas third most valuable export, coffee. Kenyas other significant exports are petroleum products, sold to near neighbors, fish, cement, pyrethrum, and sisal. The leading imports are crude petroleum, chemicals, manufactured goods, machinery, and transportation equipment. Africa is Kenya's largest export market, followed by the European Union. The major destinations for exports are the United Kingdom (UK), Tanzania, Uganda, and the Netherlands. Major suppliers are the UK, United Arab Emirates, Japan, and India. Kenyas main exports to the United States are garments traded under the terms of the African Growth and Opportunity Act (AGOA). Despite AGOA, Kenyas apparel industry is struggling to hold its ground against Asian competition and runs a trade deficit with the United States. Many of Kenya's problems relating to the export of goods are believed by most economists to be caused by Kenya's export of inexpensive goods that saturate the global market but do little to substantially raise the amount of money coming into the country. Kenya typically has a substantial trade deficit. The trade balance fluctuates widely because Kenyas main exports are primary commodities subject to the effects of both world prices and
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Republic of Kenya weather. In 2005 Kenyas income from exports was about US$3.2 billion. The payment for imports was about US$5.7 billion, yielding a trade deficit of about US$2.5 billion. In 2006 Kenya had a current account deficit of US$1.5 billion. This figure was a significant increase over 2005, when the current account had a deficit of US$495 million. In 2006 the current account balance as a percentage of gross domestic product was 4.2. In 2006 Kenyas external debt totaled US$6.7 billion. The debt is forecast to be a manageable 30 percent of gross domestic product in 2007. Kenyan policies on foreign investment generally have been favorable since independence, with occasional tightening of restrictions to promote the Africanization of enterprises. Foreign investors have been guaranteed ownership and the right to remit dividends, royalties, and capital. In the 1970s, the government disallowed foreign investment unless there was also some government participation in the ownership of an enterprise. Notwithstanding some restrictions, between 60 and 70 percent of industry is still owned from abroad, a significant portion of which can be traced to fraudulent asset transfers by the colonial Britain during transition to independence. This denied Kenyans the opportunity to progress economically - relegating most of them to poverty and creating conditions that would lead to dependency on foreign aid. However, Kenyan has had more economic success and more success raising its own quality of life than some of its neighbors in Sub-Saharan Africa. Important multinationals active in Kenya Barclays Bank, Standard Chartered Bank and mobile service provider Vodafone (all three from the UK) are among the top companies doing business in Kenya. Also present are Bata, the global shoe company headquartered in Canada, and Beiersdorf, the German chemical manufacturer and producer of Nivea skincare products. Other multinationals operating in Kenya includes British American Tobacco (BAT), food manufacturer Cadbury and Toyota Tsusho Corporation.

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Republic of Kenya KENYA EXPORTS Kenya exports were worth 45.3 Billion KES in October of 2011. Agricultural products are central to Kenya's export industry with horticultural and tea being the most important. Other export items include textiles, coffee, tobacco, iron and steel products, petroleum products, cement. Kenya main exports partners are UK, Netherlands, Uganda, Tanzania, United States and Pakistan.

KENYA IMPORTS Kenya imports were worth 115.7 Billion KES in October of 2011. Kenya imports mostly machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics. Kenya main import partners are India, China, UAE, South Africa, Saudi Arabia, United States and Japan.

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Republic of Kenya

REGIONAL ECONOMIC OVERVIEW

The East African Countries of Kenya, Tanzania, Uganda and Rwanda experienced modest GDP growth rates of 5.6% to 7% in 2010/11. Significantly, with the exception of Kenya, all the other three countries experienced reduced growth rates compared to 2009/10. Kenyas growth was grounded on strong performance across all the key sectors of the economy with agriculture recording marked improvement after two consecutive years of decline. The country also shook off the effects of the post election violence. Tanzania and Uganda carried out their general elections during the year in contrasting environments. All the same, the two countries managed to post positive GDP growth. In Uganda, the GDP growth was attributed to recovery in construction and wholesale trade, and improved performance in telecommunications, financial services, mining and quarrying subsectors. Continuing economic recovery in the global economy boosted Tanzanias tourist and Foreign Direct Investment (FDI) inflows and the demand for its exports. Sectors such as communications, energy and gas, construction and financial services recorded impressive growth compared to the past year Rwanda benefited from a stable macroeconomic environment and recorded the lowest inflation in the region. While agriculture recorded reduced growth, improved performance in the manufacturing, electricity, and construction sectors helped to bolster growth. The year 2011/12 budgets have been prepared in the wake of rising food and fuel prices. The win effect of the high food and fuel costs have pushed up the cost of living across the region, resulting in simmering discontent. In both Uganda and Kenya, the citizenry has protested publicly under the so called walk to work and unga revolution protests. All the four finance ministers have been careful to include in their budgets social interventions to cushion their citizens against the rising cost of living. These and other measures aimed at stimulating economic growth are the key messages in the 2011/12 budgets.

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Republic of Kenya

COMPARISON OF E.A MACRO-ECONOMIC INDICATORS

Comparison of E.A Macroeconomic Indicators GDP current prices(USD Million) Real GDP growth rate(%)2010/11 Real GDP growth rate(%)2009/10 Population(Million) GDP per capita(USD)current prices Overall inflation rate (%) Treasury bill interest rate (%) Budget deficit % of GDP at current prices Development expenditure as a % of GDP at current prices Development expenditure as a % of total expenditure Total public debt(USD million) Trade deficit as % of GDP current prices Tax revenues (USD million) EA Total/ Average

Kenya

Tanzania

Uganda

Rwanda

32,187 5.6 2.6 39.8 808.7 4.1 3.6 5.4

23,104 6.5 6.0 43.7 528.7 6.3 5.5 6.5

16,567 6.3 5.5 31.8 521.0 11.3 8.6 4.8

5,964 7.0 7.5 10.7 532.1 3.9 6.7 4.2

77,822 6.1 4.6 126 617.6 6.3 5.5 5.5

12.0

10.9

8.7

12.0

11.0

31.0 13,417 21.0 7,937

37.3 11,241 9.5 3,436

36.6 4,300 13.8 2,145

45.8 946 17.2 800

35.2 29,904 15.8 14,318

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CRITICISM AND CHALLENGES

The economys heavy dependence on rain-fed agriculture and the tourism sector leaves it vulnerable to cycles of boom and bust. The agricultural sector employs nearly 75 percent of the countrys 38 million people. Half of the sectors output remains subsistence production. Kenyas economic performance has been hampered by numerous interacting factors: heavy dependence on a few agricultural exports that are vulnerable to world price fluctuations, population growth that has outstripped economic growth, prolonged drought that has necessitated power rationing, deteriorating infrastructure, and extreme disparities of wealth that have limited the opportunities of most to develop their skills and knowledge.

Poor governance and corruption also have had a negative impact on growth, making it expensive to do business in Kenya. According to Transparency International, Kenya ranks among the worlds half-dozen most corrupt countries. Bribery and fraud cost Kenya as much as US$1 billion a year. Kenyans, 23 percent living on less than US$1 per day, pay some 16 bribes a monthtwo in every three encounters with public officials. Another large drag on Kenyas economy is the burden of human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS). Prospects significantly improved under the Kibaki government, whose policy aims include budgetary reforms and debt restraint. Kenya's economic policies have been subjected to criticism by western donors. There is debate as to the validity of, and motivations behind, such criticism. Despite early disillusionment of western donors with the government, the economy has seen a broad-based expansion, led by strong performance in tourism and telecommunications, and acceptable post-drought results in agriculture, especially the vital tea sector. Kenya's economy grew by more than 7% in 2007 and its foreign debt was greatly reduced. Western donors are now adopting a less paternalistic attitude towards their relations with African nations. However there is still significant improvement to be done.

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CONCLUSION
Kenya is one of the most developed and economically robust nations in Africa. Kenya is considered by many today to be the heartland of East Africa. The country is home to some of the best national parks and game reserves in Africa with diverse ecosystems, from snowcapped mountains, semi-arid desert regions and rainforests, to acacia-studded savannahs, flamingo lakes, white palm-fringed ocean beaches and coral reefs. It has nature's most impressive displays of wildlife .Kenya has a very large population, which is growing rapidly, even by standards for developing nations. Unfortunately, this will mean severe socioeconomic strains on individuals and families. Kenya is endowed with a rich heritage of plant and animal, which allow for a wide range of economic activities. Kenya is strategically located within easy reach of export markets in the region, Middle East, Europe and Asia. Political stability coupled with modern infrastructure that has been developed over the years has made Kenya a natural base for the administration of relief assistance to troubled neighboring countries taking part in peacekeeping missions. Political stability and the pragmatic economic approach that the Government has followed to encourage foreign and local investment, has led to a remarkable development in various sectors. Kenya's economy depends largely on Agriculture, which accounts for over one third of the GDP and approximately two thirds of exports. Agriculture is supplemented by manufacturing, commerce and tourism, which collectively account for an additional one-quarter of GDP. Agriculture is the leading economic sector, accounting for 25% of the gross domestic product (GDP). Agriculture employs about 75-80% of working Kenyans. However, undependable weather conditions and a severe shortage of arable land hamper farming. In addition, soil erosion, deforestation, and desertification are increasing problems for Kenya's farmers. The nation's heavy dependence upon agriculture makes economic conditions for most Kenyans very difficult. Although Kenya's economic performance has exceeded that of most other African nations, the benefits of this growth have been seriously diluted by a variety of factors. The large population growth, increasing economic inequality, and environmental deterioration have negatively affected Kenya.

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Republic of Kenya BIBLIOGRAPHY Information was taken from the following sources:www.nationsencyclopedia.com/economies/Africa/Kenya-INFRASTRUCTURE-POWER-ANDCOMMUNICATIONS.html www.centralbank.go.ke/ www.tradingeconomics.com/kenya/inflation-cpi www.bbc.co.uk/news/world-africa www.infoplease.com/ipa/A0107678.html www.africaguide.com/country/kenya/culture.htm kenya.rcbowen.com/economy/ maps.google.co.in www.africaneconomicoutlook.org/en/countries/east-africa/kenya/ wwp.greenwichmeantime.com/time-zone/africa/kenya/currency.htm www.jambokenya.com/jambo/kenya/econ01.htm Kenya Economic Update, December 2010, www.worldbank.org/Kenya/keu Read more: Kenya Infrastructure, power, and communications, Information about Infrastructure, power, and communications in Kenya www.nationmaster.com Africa Kenya allafrica.com/kenya/ www.nationsonline.org/oneworld/kenya.htm http://www.geographia.com/kenya/ www.indexmundi.com Kenya Economy www.pwc.com/ke/en/industries www.mbendi.com The World Africa Kenya

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